TOKYO (Reuters) - Stock markets and the euro started the week on a cautious note on Monday as a Greek debt deal struck last week remained in the balance until Athens drew up a list of reforms to satisfy its creditors.
Although an initial relief over the last-minute deal boosted Wall Street shares to record highs late on Friday, Asian markets saw little follow-up buying.
Australian shares dipped 0.2 percent on disappointment over corporate earnings, while MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS also eased 0.2 percent.
U.S. stock futures ESc1 opened flat in Asia but Japan’s Nikkei .N225 could track Wall Street’s sizable gains to scale another 15-year high.
“Greece asked for a six-month extension but it ended up with a four-month extension. The agreement appears to mainly focus on averting a default for now, rather than solving issues,” said Hiroki Shimazu, senior market economist at SMBC Nikko Securities.
“Although the market reacted positively on Friday, I think there will be more twists and turns down the road. Ultimately Greece has to carry out reforms but it is uncertain given that the government has won by promising not to reform,” he added.
Greece has to provide a list of reform measures to euro zone by Monday to secure financing but domestically it came under attack for selling “illusions” to voters after failing to keep a promise to extract the country from its international bailout.
The euro traded at $1.1383 EUR= little changed from late U.S. levels and was stuck within its well worn trading range of the past few weeks centering around $1.13-1.15.
The yen was also steady, trading at 119.05 yen JPY= to the dollar.
Activity in Asia is likely to pick up as many market players return from Lunar New Year holidays though the mainland Chinese markets will remain shut until Wednesday.
In Europe, Germany’s Ifo business climate index is expected to show a continued recovery in the euro zone’s powerhouse. [DEBUSS=ECI]
One of the biggest events for the week is Federal Reserve Chair Janet Yellen’s testimony on the economy and monetary policy before the Congress on Tuesday.
Although the minutes from the Fed’s last policy meeting published last week were more dovish than expected, mounting signs of strength in the U.S. jobs market could revive expectation of a rate hike in June.
Editing by Shri Navaratnam